Comment of the Day: Charles Steindel: "That's Kocherlakota's point: through 2020. Here is Kocherlakota's language:

Overall: I see it as possible and beneficial to adopt policies that would lead to 5-6% growth per year over the next four years--which translates into a level of output in 2020 that is about 15% higher than is currently anticipated.

The 15% would carry forward, so output in 2026 would be 15% higher than the baseline. This is more or less what Brad seems to be suggesting as an extreme. Friedman zips that forward to a permanently higher rate of growth, leaving 2026 output 37% higher than the baseline. The other 22% would be coming from some sort of supply-side response (you can't apply demand multipliers once you get to full employment.) Kocherlakota's reasoning isn't that sort of supply-side response: he's assuming there is likely a backlog of good productivity-enhancing ideas that haven't been implemented because of lousy demand. Increase demand, the ideas get implemented, and there is a spurt of non-inflationary growth. Not unreasonable, but we can dispute the likely magnitude and length. 10 years of it is a long time for that to play out....

Neither Kocherlakota nor Thoma buy into Friedman's numbers. At most (Thoma is more explicit) they think that the balance of risks favor more aggressive stimulus. I wouldn't argue with that, but I also wouldn't make any promises that the policy will deliver what is claimed, or make an iron-clad commitment that the policy would be sustained under any circumstances.